๐—™๐—ฟ๐—ผ๐—บ ๐—ก๐—ถ๐—ฐ๐—ต๐—ฒ ๐˜๐—ผ ๐— ๐—ฎ๐—ถ๐—ป๐˜€๐˜๐—ฟ๐—ฒ๐—ฎ๐—บ: ๐—–๐—ผ๐—ป๐˜ƒ๐—ฒ๐—ฟ๐˜๐—ถ๐—ฏ๐—น๐—ฒ ๐—•๐—ผ๐—ป๐—ฑ๐˜€ ๐—ฆ๐˜‚๐—ฟ๐—ด๐—ฒ ๐—ฎ๐˜€ ๐—–๐—ฟ๐—ฒ๐—ฑ๐—ถ๐˜ ๐—–๐—ผ๐˜€๐˜๐˜€ ๐—•๐—ถ๐˜๐—ฒย 
The last 12 months have seen a significant rise in convertible bond issuance. After a subdued period, 2023 saw a 77% jump in activity with total convertibles issuance reaching $48 billion. Atย Laz Partnersย we expect this upswing to hold the potential to influence hiring needs across our client base, and expertise in convertible bonds becoming an in-demand capability in the coming year.

๐——๐—ฒ๐—ฏ๐˜ ๐—ฅ๐—ฒ๐—ณ๐—ถ๐—ป๐—ฎ๐—ป๐—ฐ๐—ถ๐—ป๐—ด ๐——๐—ฟ๐—ถ๐˜ƒ๐—ฒ๐˜€ ๐—–๐—ผ๐—ป๐˜ƒ๐—ฒ๐—ฟ๐˜๐—ถ๐—ฏ๐—น๐—ฒ ๐—•๐—ผ๐—ผ๐—บ
A key factor driving the convertibles resurgence is the approaching debt maturity wall. US IG companies face a record $1.26 trillion in refinancing needs over the next five years, while their junk-rated counterparts grapple with $1.87 trillion. Convertible bonds traditionally offer lower borrowing costs vs traditional bonds without immediate shareholder dilution through stock offerings. Car-sharing giant Uber exemplifies this, having secured a $1.5 billion convertible at a sub-1% interest rate in Q4 2023, significantly lower than the current 5.2% average for IG bonds.

๐—•๐—ฒ๐˜†๐—ผ๐—ป๐—ฑ ๐—ง๐—ฟ๐—ฎ๐—ฑ๐—ถ๐˜๐—ถ๐—ผ๐—ป๐—ฎ๐—น ๐—จ๐˜€๐—ฒ๐—ฟ๐˜€
Historically favoured by young tech & biotech companies, convertibles are now attracting established players across sectors, a shift that reflect the convertiblesโ€™ increasing appeal in a rising rates environment where even IG borrowers face higher borrowing costs. Utility giants PG&E and Evergy’s recent participation in the convertible market is another example of its widening reach.

๐—œ๐—บ๐—ฝ๐—ฎ๐—ฐ๐˜ ๐—ผ๐—ป ๐—–๐—ฟ๐—ฒ๐—ฑ๐—ถ๐˜ ๐—›๐—ถ๐—ฟ๐—ถ๐—ป๐—ด
This market shift translates to potential talent gaps to cover this expertise. Hiring managers will likely prioritize candidates with:

โ€ข ๐——๐—ฒ๐—ฒ๐—ฝ ๐˜‚๐—ป๐—ฑ๐—ฒ๐—ฟ๐˜€๐˜๐—ฎ๐—ป๐—ฑ๐—ถ๐—ป๐—ด ๐—ผ๐—ณ ๐—ฐ๐—ผ๐—ป๐˜ƒ๐—ฒ๐—ฟ๐˜๐—ถ๐—ฏ๐—น๐—ฒ ๐˜€๐˜๐—ฟ๐˜‚๐—ฐ๐˜๐˜‚๐—ฟ๐—ฒ๐˜€ ๐—ฎ๐—ป๐—ฑ ๐˜ƒ๐—ฎ๐—น๐˜‚๐—ฎ๐˜๐—ถ๐—ผ๐—ป:ย Expertise in analyzing conversion premiums,ย equity upside potential & credit protection mechanisms
โ€ข ๐—ฆ๐˜๐—ฟ๐—ผ๐—ป๐—ด ๐—ฟ๐—ฒ๐—ณ๐—ถ๐—ป๐—ฎ๐—ป๐—ฐ๐—ถ๐—ป๐—ด ๐—ฎ๐—ป๐—ฑ ๐—ฟ๐—ฒ๐˜€๐˜๐—ฟ๐˜‚๐—ฐ๐˜๐˜‚๐—ฟ๐—ถ๐—ป๐—ด ๐˜€๐—ธ๐—ถ๐—น๐—น๐˜€:ย As companies optimize their debt portfolios,ย candidates adept at formulating refinancing strategies & incorporating convertibles will be highly sought-after
โ€ข ๐—•๐—ฟ๐—ผ๐—ฎ๐—ฑ๐—ฒ๐—ฟ ๐—ถ๐—ป๐—ฑ๐˜‚๐˜€๐˜๐—ฟ๐˜†/๐˜€๐—ฒ๐—ฐ๐˜๐—ผ๐—ฟ ๐—ธ๐—ป๐—ผ๐˜„๐—น๐—ฒ๐—ฑ๐—ด๐—ฒ:ย The expanding use of convertibles across sectors will mean a need for talent with sector knowledge beyond traditional tech & healthcare niches.

๐—ข๐˜‚๐˜๐—น๐—ผ๐—ผ๐—ธ ๐Ÿฎ๐Ÿฌ๐Ÿฎ๐Ÿฐ
We expect the surge in convertible bonds not to be a short-term financial trend; it signals a shift within Credit with tangible implications for future talent needs.